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On January 1, 2018, Mania Enterprises issued 12% bonds dated January 1, 2018, with a face...

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Accounting

On January 1, 2018, Mania Enterprises issued 12% bonds datedJanuary 1, 2018, with a face amount of $20.1 million. The bondsmature in 2027 (10 years). For bonds of similar risk and maturity,the market yield is 10%. Interest is paid semiannually on June 30and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of$1 and PVAD of $1)

Required:
1. Determine the price of the bonds at January 1,2018.
2. Prepare the journal entry to record the bondissuance by Mania on January 1, 2018.
3. Prepare the journal entry to record interest onJune 30, 2018, using the effective interest method.
4. Prepare the journal entry to record interest onDecember 31, 2018, using the effective interest method.

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